NBA Board of Governors approves sale of team to Tom Benson

The NBA Board of Governors on Wednesday approved the sale of the Hornets to Tom Benson, the league announced. The Hornets are expected to make an announcement concerning Benson’s takeover today. Louisiana Gov. Bobby Jindal has signed off on the state’s capital outlay bill, which included nearly $60 million for improvements to New Orleans Arena, as well as on the extension of the Quality Jobs Tax Credit, both of which were vital in the state’s agreement with the Hornets to extend the lease in the arena through 2024.

MICHAEL DEMOCKER / THE TIMES-PICAYUNETom Benson, who in April agreed to purchase the Hornets from the NBA for $338 million, is now officially the team's owner.

According to sources with knowledge of the process, the NBA has been gathering votes all week from the 29 other Board of Governors’ representatives, a formality that can officially consummate the transfer of ownership from the league, which purchased the team in December 2010, to Benson.

On April 13, Benson, who also owns the Saints, signed an agreement to purchase the Hornets from the NBA for $338 million.

In the intervening months, the legislature debated, and eventually included, capital improvement funding for the arena, which will eliminate state subsidies of potentially $7 million to $8 million annually to assist the Hornets financially, money the team received under terms of the existing lease in the event certain financial levels were not achieved.

The building’s improvements are aimed at enabling the Hornets to reap additional revenues through various enhancements.

At the same time, the NBA has been vetting Benson, a standard process that customarily takes one to two months, while simultaneously waiting for the legislature to sign off on the funding requirements for arena upgrades.

Commissioner David Stern took the unprecedented step of buying the Hornets, then in a state of financial disarray, from founding owner George Shinn, who had offers from out-of-state suitors who intended to buy the team and move it out of New Orleans.

Shortly after buying the franchise, and essentially placing it in receivership, Stern put New Orleans native Jac Sperling in charge of finding an owner, preferably locally, who would keep the Hornets in New Orleans, while also attempting to improve the team’s economic condition and negotiating a more favorable lease with the state.

In late March, Sperling and team president Hugh Weber announced an agreement in principle with the state regarding a lease extension through 2024, contingent upon the franchise’s sale, state funding for arena improvements and an extension of the Quality Jobs Tax Credit. The tax credit provision, which was originally approved when the Hornets relocated here from Charlotte in 2002, provides the team about $3.6 million in annual tax breaks. It was due to expire this year.

The Louisiana Stadium and Exposition District approved the new lease with the Hornets at its meeting April 18.

The revised lease, which is void of escape clauses, goes into effect July 1, and binds the Hornets to New Orleans through at least 2024.

Wednesday’s approval by the NBA Board of Governors officially closes the 17-month saga during which the league was almost universally criticized for taking the unique step of owning the team.

On the day the league announced Benson’s agreement to buy, Stern, sitting on a dais next to Benson, told him, “Congratulations, Tom. You’re one player away.”

The NBA made no comments Wednesday beyond a one-sentence release stating that the Board of Governors had approved the sale.

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Jimmy Smith can be reached at jsmith@timespicayune.com or 504.826.3814.